Deal #1839

215 ha irrigated. In 2011, the company stated its intent to acquire an additional 5,200 ha of land, 20 km from Mngeta. However, Agrica’s CEO, Mr. Coleman, asserts that KPL no longer plans to expand beyond its Mngeta Farm (2015). 2019 shapefile added indicate an area of 5414 ha in operation.

Rice and maize farming

Purchase contract signed in 2006. One report states the KPL was established in 2007, with the acquisition of the farm completed in 2008.

First sales of processed rice in January 2010. The farm was originally started in 1986 as a project between former Tanzanian president Julius K. Nyerere and Kim Il Sung through a Tanzanian-North Korean government joint venture (KOTACO). KOTACO surveyed the farm, cleared the property, built 185 km of roads and approximately 290 km of drainage ditches, and started to produce rice on approximately 2,500 ha. After investing over $25 million in the unfinished project, KOTACO was liquidated in 1993, leaving the farm and its equipment with RUBADA. In 1999, the Mngeta farm was contracted to Kilombero Holding Company (KIHOCO). KIHOCO was never able to commence production on more than 400 ha, and after falling five years behind in rent payments, it was forced off the farm. The company has ceased operation in 2019. The plantations under the new investor are for sale after defaulting on several loans (2019). The company states that the army worm, flooding of plantations and cheap imports without tariffs from other countries lead a low maize prices- which is unprofitable. A Tanzanian bank, NMB, currently manages the farm. According to a media report, Agrica has never been profitable, and has struggled with floods, droughts and unstable market prices for rice in Tanzania.

250 farmers participated in 2011. Farmers have increased yields from one ton per hectare to 4.42 tons a hectare under the smallholder program. The company is currently searching for loan facilities for the smallholders, so that the company can sign an off-take agreement with the smallholders. This will replace the old debt system where the company granted cash to the farmers in lieu of crops. The debt was to be repaid in strict installments, many outgrowers were not able to. In addition, the outgrowers got paid a lower-than market related price for their output. Data source #18 (Large-Scale Agricultural Investments and Smallholder Welfare: A Comparison of Wage Labor and Outgrower Channels in Tanzania) mentions the results of a study on the outgrower scheme.